House Introduced Bill 4876

HOUSE BILL No. 4876


     June 5, 2001, Introduced by Reps. Jelinek, Sheltrown, Stewart, Basham, Birkholz, Pumford, Hansen, Plakas, Patterson, Cameron Brown, Schauer,
Pappageorge, Minore, Middaugh, Bogardus, Richner, Richardville, Bovin, Hart, Godchaux, Switalski, Gieleghem and Lemmons and referred to the
Committee on Appropriations.


        A bill to amend 1961 PA 108, entitled

   "School bond qualification and loan act,"

   by amending the title and sections 1, 2, 3, 4, 4a, 5, 6, 7, 8, 9,

   9b, 10, 10a, 11, and 12 (MCL 388.951, 388.952, 388.953, 388.954,

   388.954a, 388.955, 388.956, 388.957, 388.958, 388.959, 388.959b,

   388.960, 388.960a, 388.961, and 388.962), the title and sections

   6 and 9 as amended and section 9b as added by 1991 PA 65, sec-

   tions 2, 4, and 11 as amended by 1992 PA 228, section 3 as

   amended by 1985 PA 25, section 4a as amended by 1991 PA 22, sec-

   tion 5 as amended by 1983 PA 124, and section 10 as amended and

   section 10a as added by 1989 PA 6, and by adding sections 1a, 9c,

   and 11a; and to repeal acts and parts of acts.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:






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                                    TITLE

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           An act to PRESCRIBE THE PROCEDURES, TERMS, AND CONDITIONS

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      FOR THE QUALIFICATION OF SCHOOL BONDS; TO provide for loans by

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      the state of Michigan to school districts for the payment of

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      principal and interest upon school bonds; to prescribe the terms

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      and conditions of the loans and the conditions upon which levies

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      for bond principal and interest shall be included in computing

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      the amount to be so loaned by the state; to prescribe  the

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      CERTAIN powers and duties of the  superintendent of public

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      instruction and the  state treasurer in relation to such loans;

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      to provide for the repayment of such loans; to provide

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       incentives for repayment of such loans  FOR CERTAIN FEES; to

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      provide for other matters in respect to such loans; and to make

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      an appropriation.

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           Sec. 1.  (1) THIS ACT SHALL BE KNOWN AND MAY BE CITED AS THE

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      "SCHOOL BOND QUALIFICATION AND LOAN ACT".

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           (2) The purpose of this act is to implement section 16 of

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      article  9  IX of the  1963 Michigan  STATE constitution
    , here-

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      inafter referred to as section 16  OF 1963.

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           (3) AS USED IN THIS ACT:

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           (A) "ADJUSTED TAXABLE VALUE" MEANS THE VALUATION ON WHICH

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      DEBT MILLAGE FOR QUALIFIED BONDS CAN BE LEVIED.  NOT LATER THAN

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      JUNE 30 OF EACH YEAR, THE STATE TREASURER SHALL ISSUE A TREASURY

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      BULLETIN CONTAINING THE CURRENT ADJUSTMENTS TO EQUALIZED TAXABLE

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      VALUE TO CALCULATE ADJUSTED TAXABLE VALUE.

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           (B) "ADJUSTED TAXABLE VALUE PER MEMBERSHIP PUPIL" MEANS A

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      SCHOOL DISTRICT'S ADJUSTED TAXABLE VALUE FOR THE CALENDAR YEAR



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      ENDING IN THE IMMEDIATELY PRECEDING STATE FISCAL YEAR DIVIDED BY

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      THE SCHOOL DISTRICT'S MEMBERSHIP, AS CALCULATED UNDER THE STATE

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      SCHOOL AID ACT, 1979 PA 94, MCL 388.1601 TO 388.1772, FOR THE

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      SCHOOL YEAR ENDING IN THE IMMEDIATELY PRECEDING STATE FISCAL

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      YEAR.

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           (C) "BOND PURPOSE" MEANS THE PURPOSE FOR THE USE OF BOND

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      PROCEEDS AS STATED IN THE OFFICIAL BALLOT SUBMITTED TO THE SCHOOL

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      ELECTORS OF THE SCHOOL DISTRICT.

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           (D) "CAPITAL EXPENDITURES" MEANS EXPENDITURES FOR WHICH

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      BONDS MAY BE ISSUED BY A SCHOOL DISTRICT UNDER SECTION 1351A OF

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      THE REVISED SCHOOL CODE, 1976 PA 451, MCL 380.1351A.

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           (E) "COMPLETION OF A PROJECT" MEANS ALL CAPITAL EXPENDITURE

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      ACTIVITIES AS IDENTIFIED WITHIN A SCHOOL DISTRICT'S APPLICATION

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      FOR QUALIFICATION OF BONDS HAVE BEEN COMPLETED TO A DEGREE THAT

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      THE FACILITY HAS BEEN CERTIFIED, IN CONFORMANCE WITH EXISTING

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      INDUSTRY AND LEGAL STANDARDS, AS BEING READY TO BE OCCUPIED OR

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      USED FOR THE PURPOSE FOR WHICH IT IS INTENDED.

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           (F) "GENERAL PRICE LEVEL" MEANS THAT TERM AS DEFINED IN

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      SECTION 33 OF ARTICLE IX OF THE STATE CONSTITUTION OF 1963.

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           (G) "PROJECT" MEANS AN INDIVIDUAL SCHOOL FACILITY OR LOCA-

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      TION IDENTIFIED FOR CAPITAL EXPENDITURES AS DESCRIBED WITHIN A

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      SCHOOL DISTRICT'S APPLICATION FOR QUALIFICATION OF BONDS.

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           (H) "QUALIFIED BONDS" MEANS GENERAL OBLIGATION BONDS OF A

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      SCHOOL DISTRICT ISSUED ON OR AFTER JANUARY 1, 1964 FOR CAPITAL

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      EXPENDITURES, INCLUDING REFUNDING BONDS, THAT ARE QUALIFIED UNDER

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      THIS ACT FOR STATE LOANS TO SCHOOL DISTRICTS, AS DEFINED IN

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      SECTION 16 OF ARTICLE IX OF THE STATE CONSTITUTION OF 1963.



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           (I) "QUALIFIED DEBT SERVICE" MEANS DEBT SERVICE ON QUALIFIED

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      BONDS.

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           (J) "QUALIFIED MILLAGE" MEANS MILLAGE LEVIED TO PAY DEBT

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      SERVICE ON QUALIFIED BONDS.

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           (K) "SCHOOL BOND LOAN FUND" MEANS THAT FUND AS CREATED UNDER

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      1961 PA 112, MCL 388.981 TO 388.985.

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           (l) "STATE TREASURER" MEANS THE STATE TREASURER OR HIS OR

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      HER DESIGNEE.  THIS DESIGNATION SHALL BE MADE BY THE STATE TREA-

 9
      SURER AND SHALL BE IN A WRITTEN INSTRUMENT SIGNED BY THE STATE

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      TREASURER AND MAINTAINED IN A PERMANENT FILE.  FOR THE PURPOSES

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      OF ALL OTHER PROVISIONS OF THIS ACT, THE SIGNATURE OF THE STATE

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      TREASURER'S DESIGNEE SHALL HAVE THE SAME FORCE AND EFFECT AS THE

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      SIGNATURE OF THE STATE TREASURER.

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           (M) "TAXABLE VALUE PER MEMBERSHIP PUPIL" MEANS A SCHOOL

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      DISTRICT'S TAXABLE VALUE FOR THE CALENDAR YEAR ENDING IN THE

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      IMMEDIATELY PRECEDING STATE FISCAL YEAR DIVIDED BY THE SCHOOL

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      DISTRICT'S MEMBERSHIP, AS CALCULATED UNDER THE STATE SCHOOL AID

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      ACT OF 1979, 1979 PA 94, MCL 388.1601 TO 388.1772, FOR THE SCHOOL

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      YEAR ENDING IN THE IMMEDIATELY PRECEDING STATE FISCAL YEAR.

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           (N) "TOTAL INTEREST" MEANS THE TOTAL INTEREST INCURRED ON

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      BONDS PLUS THE TOTAL INTEREST COST OF ANY SCHOOL BOND LOAN FUND

22
      BORROWINGS.

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           SEC. 1A.  THE LEGISLATURE FINDS AND DECLARES ALL OF THE

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      FOLLOWING:

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           (A) THE UTILIZATION OF THE SCHOOL BOND LOAN FUND BY SCHOOL

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      DISTRICTS HAS A MATERIAL IMPACT ON THE CREDIT AND FISCAL

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      INTEGRITY OF THIS STATE.



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           (B) THE FIDUCIARY RESPONSIBILITY OF THE STATE TREASURER

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      INCLUDES THE PROTECTION OF THE CREDIT OF THIS STATE, THE FISCAL

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      INTEGRITY OF THIS STATE, AND THE FISCAL INTEGRITY OF SCHOOL

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      DISTRICTS.

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           (C) THE ABILITY OF THE STATE TO FULFILL THE REQUIREMENTS OF

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      SECTION 16 OF ARTICLE IX OF THE STATE CONSTITUTION OF 1963 MUST

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      NOT BE COMPROMISED.

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           Sec. 2.  (1) If the minimum amount  which  it would other-

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      wise be necessary for a school district to levy in any year to

10
      pay principal and interest on its qualified bonds, including any

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      necessary allowances for estimated tax delinquencies, exceeds

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       13  7 mills  or the computed millage under subsection (2),

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      whichever is less,  on each dollar of its  assessed valuation as

14
      last equalized by the state  ADJUSTED TAXABLE VALUE, then the

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      school district may elect to borrow  all or any part  NOT MORE

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      THAN 90% of the excess from  the  THIS state.   In that event

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      HOWEVER, IF THAT MINIMUM AMOUNT IT WOULD OTHERWISE BE NECESSARY

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      FOR A SCHOOL DISTRICT TO LEVY EXCEEDS 13 MILLS ON EACH DOLLAR OF

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      ITS ADJUSTED TAXABLE VALUE, THEN THE SCHOOL DISTRICT MAY ELECT TO

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      BORROW ALL OR ANY PART OF THE EXCESS FROM THIS STATE.  FURTHER,

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      IF THE STATE TREASURER DETERMINES THAT A SCHOOL DISTRICT IS

22
      REQUIRED TO LEVY MORE THAN 7 MILLS ON EACH DOLLAR OF ITS ADJUSTED

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      TAXABLE VALUE IN ORDER FOR THE SCHOOL DISTRICT TO BE ABLE TO PAY

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      THE PRINCIPAL AND INTEREST ON ALL OF ITS QUALIFIED BONDS AND ON

25
      LOANS MADE TO THE SCHOOL DISTRICT UNDER THIS ACT BY NOT LATER

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      THAN 60 MONTHS AFTER THE FINAL MATURITY DATE OF ALL OF THE SCHOOL

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      DISTRICT'S THEN OUTSTANDING QUALIFIED BONDS, TAKING INTO ACCOUNT



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      LOANS MADE TO THE SCHOOL DISTRICT UNDER THIS ACT FOR DEBT SERVICE

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      AND ANY LAWFUL SUBSIDIES THE STATE TREASURER REASONABLY EXPECTS

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      THE SCHOOL DISTRICT TO RECEIVE, THEN THE SCHOOL DISTRICT MUST

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      LEVY THAT ADDITIONAL MILLAGE, UP TO 13 MILLS, AS A CONDITION TO

 5
      RECEIVING A LOAN UNDER THIS ACT.  UPON A SHOWING OF COMPELLING

 6
      JUSTIFICATION BY THE SCHOOL DISTRICT, THE STATE TREASURER MAY

 7
      EXTEND THE 60-MONTH PERIOD SPECIFIED IN THE PRECEDING SENTENCE TO

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      A LONGER PERIOD NOT TO EXCEED 120 MONTHS OR MAY IN THE FINAL

 9
      QUALIFICATION OF A BOND ISSUE WAIVE THE MINIMUM MILLAGE REQUIRED

10
      BY THIS SUBSECTION TO NO LESS THAN 6 MILLS, OR MAY DO BOTH.  IF A

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      SCHOOL DISTRICT MEETS ALL OF THE APPLICABLE REQUIREMENTS AND CON-

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      DITIONS UNDER THIS SUBSECTION, the state shall loan the excess

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      amount to the school district for the payment of principal and

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      interest.   For bond issues sold before October 1, 1991 or bond

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      issues sold exclusively to refund qualified bond issues sold

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      before October 1, 1991, schools shall be allowed to borrow at

17
      least the percentage over 7 mills allowed them in the 1990-91

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      fiscal year.  The school district shall levy not less than 12

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      mills or its equivalent for operating purposes.

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           (2)  The computed millage referred to in subsection (1) is

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      the number of mills as computed by the state treasurer that the

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      school district would have to levy in the year the computation is

23
      made and each succeeding year to be able to pay the principal and

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      interest on all of its qualified bonds and loans made to the

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      school district under this act, taking into account loans made to

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      the school district under this act for debt service, by not later

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      than 60 months after the final maturity date of all of its



   04154'01 **                                   7

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      qualified bonds outstanding as of the date of the computation,

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      but shall be not less than 7 mills.  The state treasurer shall

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      make the  computation  DETERMINATION UNDER SUBSECTION (1) based

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      on the following assumptions:

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           (a) An assumed interest rate on loans made under this act

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      equal to the PROJECTED average interest rate on school bond loan

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      fund notes and bonds over the  immediately preceding  NEXT

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      SUCCEEDING 5-year period.

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           (b) A projected total  state equalized valuation  ADJUSTED

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      TAXABLE VALUE for the school district that assumes  a state

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      equalized valuation  AN ADJUSTED TAXABLE VALUE growth rate or

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      decline rate equal to the school district's average yearly  state

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      equalized valuation  ADJUSTED TAXABLE VALUE growth rate or

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      decline rate over the immediately preceding 5-year period FOR THE

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      NEXT SUCCEEDING 5-YEAR PERIOD AND THEREAFTER AT A GROWTH RATE

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      EQUAL TO THE LESSER OF THAT RATE OR A RATE EQUAL TO THE MOST

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      RECENT AVAILABLE 5-YEAR AVERAGE ANNUAL GENERAL PRICE LEVEL, PLUS

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      1%, BUT NOT MORE THAN 5% PER ANNUM.

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           (3) Upon request made by a school district before June 1 of

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      any year, the  superintendent of public instruction and the

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      state treasurer annually may  jointly  issue an order waiving all

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      or a portion of the millage required to be levied by a school

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      district to pay principal and interest on its qualified bonds

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      pursuant to subsection (1) if  they find  THE STATE TREASURER

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      FINDS all of the following:

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           (a) The school board of the school district has applied to

27
      the department of  education  TREASURY for permission to levy



   04154'01 **                                   8

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      less than the millage required to be levied to pay the principal

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      and interest on its qualified bonds pursuant to subsection (1).

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           (b) The application specifies the number of mills the school

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      district requests permission to levy.

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           (c) The waiver will be financially beneficial to the state

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      or to the school district, or both.

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           (d) The waiver will not reduce the millage levied by the

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      school district to pay principal and interest on qualified bonds

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      under subsection (1) to less than 7 mills.

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           (e) The school board, by resolution, has agreed to comply

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      with all conditions that the  superintendent of public instruc-

12
      tion and the  state treasurer  consider are  CONSIDERS

13
      necessary.

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           (4) FOR BOND ISSUES APPROVED AT A REGULAR OR SPECIAL ELEC-

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      TION BEFORE JULY 1, 2001, THE AMOUNT A SCHOOL DISTRICT MAY BORROW

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      UNDER THIS ACT SHALL BE DETERMINED IN ACCORDANCE WITH THE PROVI-

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      SIONS OF THIS ACT IN EFFECT BEFORE THE EFFECTIVE DATE OF THE

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      AMENDATORY ACT THAT ADDED THIS SUBSECTION.  FOR BOND ISSUES

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      APPROVED AT A REGULAR OR SPECIAL ELECTION ON OR AFTER JULY 1,

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      2001 BUT BEFORE OCTOBER 10, 2001, THE AMOUNT A SCHOOL DISTRICT

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      MAY BORROW UNDER THIS ACT SHALL BE DETERMINED IN ACCORDANCE WITH

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      THE PROVISIONS OF THIS ACT AS IN EFFECT BEFORE THE EFFECTIVE DATE

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      OF THE AMENDATORY ACT THAT ADDED THIS SUBSECTION IF THE SCHOOL

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      DISTRICT FILES WITH THE STATE TREASURER BEFORE THE DATE OF THE

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      ELECTION APPROVING THE BOND ISSUE AN IRREVOCABLE WRITTEN REQUEST

26
      TO HAVE THOSE PROVISIONS APPLY.  FOR SCHOOL DISTRICTS WITH A

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      QUALIFIED BOND ISSUE APPROVED AT A REGULAR OR SPECIAL ELECTION ON



   04154'01 **                                   9

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      OR AFTER JULY 1, 2001 FOR WHICH THE SCHOOL DISTRICT DOES NOT FILE

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      A WRITTEN REQUEST UNDER THE PRECEDING SENTENCE OR WITH A QUALI-

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      FIED BOND ISSUE APPROVED AT A REGULAR OR SPECIAL ELECTION ON OR

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      AFTER OCTOBER 10, 2001, THE AMOUNT THE SCHOOL DISTRICT MAY BORROW

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      UNDER THIS ACT WITH RESPECT TO ALL OF THE SCHOOL DISTRICT'S QUAL-

 6
      IFIED BONDS SHALL BE DETERMINED UNDER THE PROVISIONS OF THIS ACT

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      OTHER THAN THE PRECEDING 2 SENTENCES OF THIS SUBSECTION.

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           Sec. 3.   (1) As used in this act, "qualified bonds" means

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      general obligation bonds of school districts issued for capital

10
      expenditures, including refunding bonds, issued as follows:

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           (a) Before May 4, 1955.

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           (b) On or after May 4, 1955 but before January 1, 1964, only

13
      if, and to the extent that, the bonds have been qualified pursu-

14
      ant to section 27 or 28 of article X of the state constitution of

15
      1908 and implementing acts.

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           (c) On or after January 1, 1964, if the bonds are qualified

17
      pursuant to section 16 of article IX of the state constitution of

18
      1963 and this act.

19
           (2)  All actions  heretofore  taken by the superintendent
   of

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      public instruction AND THE STATE TREASURER BEFORE THE AMENDATORY

21
      ACT THAT ADDED SECTION 1A in qualifying bonds pursuant to

22
       sections 27 and 28 of article X of the state constitution of

23
      1908 and implementing acts,  SECTION 16 OF ARTICLE IX OF THE

24
      STATE CONSTITUTION OF 1963 are validated and all certificates of

25
      qualification  heretofore or hereafter  issued by the superinten-

26
      dent OF PUBLIC INSTRUCTION OR THE STATE TREASURER are conclusive

27
      as to the existence of facts entitling the bonds to be qualified



   04154'01 **                                  10

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      as provided in the certificates and as to the qualification and

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      shall not be subject to attack in any proceeding.   Any certifi-

 3
      cate of qualification issued before January 1, 1964, qualifying

 4
      bonds pursuant to section 28 of article X of the state constitu-

 5
      tion of 1908, and the act implementing that section, shall con-

 6
      stitute qualification pursuant to section 16 of article IX of the

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      state constitution of 1963 and this act, for any bonds sold or

 8
      delivered to the purchaser of the bonds on or after January 1,

 9
      1964.  Any bonds issued between May 4, 1955 and before January 1,

10
      1964, that were partially qualified shall be considered to be

11
      100% qualified bonds if they would be 100% qualifiable under this

12
      act.

13
           (3) Bonds issued for a purpose described in section 1274a of

14
      the school code of 1976, Act No. 451 of the Public Acts of 1976,

15
      being section 380.1274a of the Michigan Compiled Laws, shall be

16
      considered general obligation bonds of school districts issued

17
      for capital expenditures.

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           Sec. 4.  (1) The  superintendent of public instruction

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      shall  STATE TREASURER SHALL NOT issue his or her certificate

20
      qualifying an issue of bonds, upon application for a certificate

21
      being made by the school district,  if the superintendent  UNLESS

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      THE STATE TREASURER finds ALL OF the following:

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           (a) That the last maturity date of the issue of bonds is not

24
      less than  10  15 years from the issuance date appearing on the

25
      bonds  subject to the following qualifications and exceptions:

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      (i) Except for bonds issued for a purpose described in section

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      1274a of the school code of 1976, Act No. 451 of the Public Acts



   04154'01 **                                  11

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      of 1976, being section 380.1274a of the Michigan Compiled Laws,

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      or as otherwise provided in this subparagraph,  if the ratio of

 3
      debt to  valuation  ADJUSTED TAXABLE VALUE of the school district

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      exceeds 4%;  ,  THAT the last maturity date of the issue of bonds

 5
       shall be  IS not less than  15  25 years from the issuance
   date

 6
      appearing on the bonds  ;  if the ratio of debt to  valuation

 7
      ADJUSTED TAXABLE VALUE of the school district exceeds 7%;  ,  OR

 8
      THAT the last maturity date of the issue of bonds  shall be  IS

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      not less than  25  29 years from the issuance date appearing on

10
      the bonds  ; or  if the ratio of debt to  valuation  ADJUSTED

11
      TAXABLE VALUE of the school district exceeds 12%.  , the last

12
      maturity date of the issue of bonds shall be not less than 29

13
      years from the issuance date appearing on the bonds.  Regardless

14
      of the ratio of debt to  valuation  ADJUSTED TAXABLE VALUE of a

15
      school district, the state treasurer may authorize the last matu-

16
      rity date of an issue of bonds of that school district to be  not

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      less than 10  A LESSER NUMBER OF years from the issuance date

18
      appearing on the bonds if the state treasurer determines it is

19
      financially beneficial to  the  THIS state or to the school

20
      district.  As used in this section, "ratio of debt to  valuation

21
      ADJUSTED TAXABLE VALUE" means that ratio arrived at by dividing

22
      the total tax supported bonded indebtedness of the school dis-

23
      trict outstanding as of the date of the filing of the application

24
      required by this act, including the bonds proposed to be quali-

25
      fied, by the  assessed valuation  ADJUSTED TAXABLE VALUE of the

26
      school district.  as last equalized by the state.  The refunding

27
      part of any proposed issue of bonds shall not be included in the



   04154'01 **                                  12

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      total indebtedness of the school district for the purposes of

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      this  section  SUBDIVISION.

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            (ii) If the bonds are issued for a purpose described in

 4
      section 1274a of Act No. 451 of the Public Acts of 1976, the last

 5
      maturity of the issue of bonds may be less than 10 years from the

 6
      issuance date appearing on the bonds but not less than the number

 7
      of years approved by the superintendent of public instruction in

 8
      the certificate of qualification.  The certificate of qualifica-

 9
      tion of the superintendent of public instruction shall contain a

10
      certification and approval that the bonds are issued for such a

11
      purpose, which approval shall be final and conclusive and shall

12
      set forth the minimum number of years for the last maturity of

13
      the bonds.

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           (b) That the yearly principal maturity date  is not less

15
      than 5 months after the major part of the taxes for the bonds

16
      becomes by law a lien upon the property assessed  AND ANY INTER-

17
      EST PAYMENT DATES ARE ESTABLISHED USING ONLY THE DATES OF MAY 1

18
      AND NOVEMBER 1 AS PAYMENT DATES.  THIS REQUIREMENT MAY BE WAIVED

19
      BY THE STATE TREASURER IF THE DISTRICT CAN PROVIDE COMPELLING

20
      JUSTIFICATION FOR ALTERNATIVE DATES.  FOR SUCH A WAIVER TO BE

21
      EFFECTIVE, IT MUST BE APPROVED BEFORE THE ISSUANCE OF THE BONDS.

22
            (c) Except as otherwise provided in this subdivision, that

23
      the amount of principal maturing in any calendar year is not less

24
      than the amount of principal maturing in any prior calendar year

25
      and, except for bonds issued for a purpose described in section

26
      1274a of Act No. 451 of the Public Acts of 1976, if the ratio of

27
      debt to valuation of the school district exceeds 12%, that the



   04154'01 **                                  13

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      first 10 principal maturities do not in the aggregate exceed 25%

 2
      of the total principal amount of the bonds proposed to be

 3
      qualified.  Regardless of the amount of principal maturing in any

 4
      calendar year and regardless of the ratio of debt to valuation of

 5
      the school district, the state treasurer may authorize principal

 6
      maturities in any amount if the state treasurer determines it is

 7
      financially beneficial to the state or to the school district.

 8
      At the request of the school district, the state treasurer may

 9
      grant that authorization as part of the procedure of preliminary

10
      qualification under subdivision (f).

11
           (C)  (d)  That the  cost  COSTS of the project for which
   the

12
      bonds are to be issued,  is within reasonable standards of cost

13
      as established by the state board of education, which standards

14
      may vary as to different localities in accordance with any vari-

15
      ance in construction costs between localities  INCLUDING, BUT NOT

16
      LIMITED TO, TOTAL INTEREST, BOND ISSUANCE COSTS, CONSTRUCTION

17
      COSTS, AND PROFESSIONAL FEES, ARE DOCUMENTED IN A FORMAT PRE-

18
      SCRIBED BY THE STATE TREASURER AND ARE CERTIFIED TO THE STATE

19
      TREASURER TO BE REASONABLE ACCORDING TO COST PARAMETERS ESTAB-

20
      LISHED BY THE STATE TREASURER UNDER SUBSECTION (3).  IF THE COSTS

21
      EXCEED THESE PARAMETERS, THE STATE TREASURER MAY DENY THE APPLI-

22
      CATION, MAY REQUIRE AN EXPLANATION OF THE VARIANCE, OR MAY

23
      REQUIRE THE SCHOOL DISTRICT TO OBTAIN AN INDEPENDENT EVALUATION

24
      OF COSTS TO BE COMPLETED BY A CONSULTANT MEETING QUALIFICATIONS

25
      SPECIFIED BY THE STATE TREASURER.

26
           (D)  (e) Except for bonds issued for a purpose described in

27
      section 1274a of Act No. 451 of the Public Acts of 1976, that



   04154'01 **                                  14

 1
      THAT there exists a need for the project based upon current and

 2
      probable future enrollment, and that the project is designed to

 3
      provide school facilities reasonably adequate to meet that need.

 4
           (E)  (f) Subject to subsection (3), if  IF a bond issue

 5
      requires an election, that  a  THE bond issue  that a school dis-

 6
      trict wishes to qualify  has been given preliminary qualification

 7
       prior to  BEFORE the official action of the SCHOOL board  of

 8
      education  calling for the election on the bond issue; THAT THE

 9
      BALLOT LANGUAGE WAS INCLUDED IN THE PRELIMINARY QUALIFICATION,

10
      PROVIDES A CLEAR STATEMENT OF THE PURPOSE FOR WHICH THE PROCEEDS

11
      OF THE BONDS WILL BE USED, AND OTHERWISE COMPLIES WITH APPLICABLE

12
      LAW; AND THAT THE SCHOOL DISTRICT CERTIFIES TO THE STATE TREA-

13
      SURER BEFORE QUALIFICATION THAT THE SCHOOL DISTRICT PROVIDED TO

14
      ITS SCHOOL ELECTORS APPROPRIATE DISCLOSURE, IN THE FORM INCLUDED

15
      IN THE PRELIMINARY QUALIFICATION, OF THE FISCAL IMPACT OF THE

16
      BOND PROPOSAL, INCLUDING AT LEAST ALL OF THE FOLLOWING:

17
           (i) THE ESTIMATED ANNUAL MILLAGE RATE TO BE LEVIED WITH AND

18
      WITHOUT THE PROPOSED BOND ISSUE.

19
           (ii) THE ESTIMATED AVERAGE ANNUAL MILLAGE RATE TO BE LEVIED

20
      OVER THE TERM OF THE PROPOSED BOND ISSUE IF THE BOND ISSUE IS

21
      APPROVED COMPARED TO THAT RATE IF THE BOND ISSUE IS NOT

22
      APPROVED.

23
           (iii) THE MAXIMUM PRINCIPAL AMOUNT TO BE BORROWED.

24
           (iv) THE NUMBER OF YEARS THE BONDS ARE EXPECTED TO BE

25
      OUTSTANDING.

26
           (v) THE ESTIMATED TOTAL INTEREST COST THAT WILL BE

27
      INCURRED.



   04154'01 **                                  15

 1
           (vi) THE ESTIMATED DURATION AND COST OF ANY SCHOOL BOND LOAN

 2
      FUND BORROWINGS.

 3
            (g) If the bonds are issued for a purpose described in sec-

 4
      tion 1274a of Act No. 451 of the Public Acts of 1976, and if the

 5
      bonds have not been approved by a majority of the school electors

 6
      voting on the question, that the school district has demonstrated

 7
      and the state treasurer has approved the method of payment for,

 8
      and the ability to pay, the bonds and that the school district

 9
      has received the prior approval of the department of treasury for

10
      the issuance of the bonds under the municipal finance act, Act

11
      No. 202 of the Public Acts of 1943, being sections 131.1 to 139.3

12
      of the Michigan Compiled Laws.

13
           (F) THAT THE SCHOOL DISTRICT CAN MEET THE REQUIREMENTS OF

14
      SECTION 2 USING THE ASSUMPTIONS CONTAINED IN THAT SECTION AND

15
      CONSIDERING ANY LAWFUL SUBSIDY THAT THE SCHOOL DISTRICT MAY REA-

16
      SONABLY EXPECT TO RECEIVE.

17
           (G) THAT THE SCHOOL DISTRICT CERTIFIES TO THE STATE TREA-

18
      SURER THAT IT HAS COMPLIED WITH ALL LEGAL REQUIREMENTS APPLICABLE

19
      TO ALL PRIOR VOTED BOND ISSUES AND WILL DO SO WITH RESPECT TO THE

20
      BOND ISSUE BEING QUALIFIED.

21
           (H) IF THE BOND ISSUE REQUIRES AN ELECTION, THAT THE SCHOOL

22
      DISTRICT CERTIFIES THAT IT WILL NOT EXPEND PROCEEDS OF THE BOND

23
      ISSUE FOR PURPOSES NOT DESCRIBED IN THE BALLOT PROPOSAL APPROVING

24
      THE BOND ISSUE UNLESS OTHERWISE PERMITTED BY LAW TO DO SO.

25
           (I) SUBJECT TO SUBSECTION (5), THAT QUALIFICATION OF THE

26
      ISSUE WILL NOT HAVE AN ADVERSE FINANCIAL IMPACT ON THIS STATE OR

27
      THE SCHOOL DISTRICT BASED ON PARAMETERS ESTABLISHED BY THE STATE



   04154'01 **                                  16

 1
      TREASURER UNDER SUBSECTION (3).  IF THE STATE TREASURER

 2
      DETERMINES THAT THE BOND ISSUE DOES NOT MEET THIS REQUIREMENT,

 3
      THE STATE TREASURER MAY APPROVE THAT PART OF THE BOND ISSUE THAT

 4
      DOES MEET THIS REQUIREMENT.

 5
           (J) THAT THE SCHOOL DISTRICT AGREES TO COMPLETE EACH PROJECT

 6
      IN ACCORDANCE WITH THE PLANS FOR THE PROJECT THAT WERE SUBMITTED

 7
      IN THE SCHOOL DISTRICT'S APPLICATION FOR PRELIMINARY QUALIFICA-

 8
      TION OF BONDS AND APPROVED IN THE BOND ELECTION, IF APPLICABLE,

 9
      WITH ONLY THOSE CHANGES AS ARE PERMITTED BY, OR APPROVED BY, THE

10
      STATE TREASURER IN ACCORDANCE WITH THE PROCEDURES ESTABLISHED BY

11
      THE STATE TREASURER UNDER SUBSECTION (3).

12
           (K) THAT, AS OF THE DATE THE APPLICATION IS FILED, THE TOTAL

13
      OUTSTANDING PRINCIPAL AMOUNT OF DEBT OF THE SCHOOL DISTRICT,

14
      INCLUDING THE BONDS PROPOSED TO BE QUALIFIED, WILL NOT EXCEED 20%

15
      OF THE ADJUSTED TAXABLE VALUE OF THE SCHOOL DISTRICT FOR THE MOST

16
      RECENT COMPLETED FISCAL YEAR.  THIS REQUIREMENT MAY BE WAIVED BY

17
      THE STATE TREASURER IF THE SCHOOL DISTRICT CAN PROVIDE COMPELLING

18
      JUSTIFICATION FOR THE WAIVER.  FOR SUCH A WAIVER TO BE EFFECTIVE,

19
      THE WAIVER MUST BE APPROVED BEFORE THE PRELIMINARY QUALIFICATION

20
      OF THE BONDS.

21
           (l) THAT QUALIFIED BONDS ISSUED FOR AN ASSET WITH A USEFUL

22
      LIFE OF LESS THAN 30 YEARS WILL NOT BE ISSUED FOR A TERM THAT IS

23
      LONGER THAN THE USEFUL LIFE OF THE ASSET COMPUTED FROM THE DATE

24
      THE ASSET IS PLACED IN SERVICE.

25
           (M) THAT PRINCIPAL AMORTIZATION OF THE BOND ISSUE WILL BE

26
      SCHEDULED SO THAT AMORTIZATION OF BONDS IS COMPLETED WITH RESPECT

27
      TO ALL ASSET CLASSIFICATIONS WITHIN THE FINANCED PROJECTS AS



   04154'01 **                                  17

 1
      DETERMINED BY THE STATE TREASURER BASED ON CRITERIA ESTABLISHED

 2
      BY THE STATE TREASURER UNDER SUBSECTION (3).

 3
           (N) THAT THE SCHOOL DISTRICT CERTIFIES THROUGH ITS APPLICA-

 4
      TION FOR FINAL QUALIFICATION THAT IT AGREES TO ALL OF THE

 5
      FOLLOWING:

 6
           (i) EXCEPT TO THE EXTENT OTHERWISE REQUIRED TO MAINTAIN THE

 7
      TAX EXEMPT STATUS OF THE BOND ISSUE OR IS NOT OTHERWISE DETRIMEN-

 8
      TAL, TO ESTABLISH A COMMON DEBT RETIREMENT FUND FOR ALL ITS

 9
      EXISTING AND PROPOSED QUALIFIED BOND ISSUES TO THE EXTENT ALLOW-

10
      ABLE UNDER STATE AND FEDERAL LAW.

11
           (ii) IF MORE THAN 1 QUALIFIED DEBT RETIREMENT FUND IS

12
      REQUIRED, TO ALLOCATE THE SCHOOL DISTRICT'S TOTAL DEBT RETIREMENT

13
      MILLAGE AMONG THE VARIOUS QUALIFIED DEBT RETIREMENT FUNDS SO AS

14
      TO MINIMIZE THE AMOUNT OF FUNDS BORROWED FROM THE SCHOOL BOND

15
      LOAN FUND.

16
           (iii) TO MAINTAIN ITS BONDED CAPITAL PROJECTS ACCOUNTING

17
      RECORDS IN A MANNER THAT PROVIDES FOR THE COMPARISON OF ACTUAL

18
      EXPENDITURES TO BUDGETED AMOUNTS AS PRESENTED IN ITS APPLICATION

19
      FOR QUALIFICATION OF BONDS.

20
           (iv) TO SUBMIT A FINAL REPORT OF BONDING ACTIVITY EXPENDI-

21
      TURES, IN A FORMAT AS PRESCRIBED BY THE STATE TREASURER, THAT HAS

22
      BEEN AUDITED IN ACCORDANCE WITH SECTION 1351A OF THE REVISED

23
      SCHOOL CODE, 1976 PA 451, MCL 380.1351A.  IF THIS AUDIT OR ANY

24
      OTHER LAWFUL REVIEW BY THE STATE TREASURER IDENTIFIES EXPENDI-

25
      TURES THAT WERE IMPROPERLY CHARGED TO A CAPITAL PROJECTS FUND

26
      FINANCED FROM QUALIFIED BOND PROCEEDS, THE SCHOOL DISTRICT SHALL





   04154'01 **                                  18

 1
      REIMBURSE THE CAPITAL PROJECTS FUND OR ITS SUCCESSOR DEBT

 2
      RETIREMENT FUND FOR THE AMOUNT OF IMPROPER EXPENDITURES.

 3
           (v) TO COMPLETE DEBT SERVICE TRANSACTIONS INCLUDING, BUT NOT

 4
      LIMITED TO, TAX COLLECTION, LOAN APPLICATIONS, AND DEBT SERVICE

 5
      PAYMENTS, FOR ALL OF ITS QUALIFIED BONDS IN ACCORDANCE WITH PRO-

 6
      CEDURES PRESCRIBED BY THE STATE TREASURER.

 7
           (O) THAT THE SCHOOL DISTRICT HAS NOT HELD MORE THAN

 8
      1 ELECTION ON APPROVAL OF THE BOND ISSUE IN ANY 6-MONTH PERIOD.

 9
           (2)  For refunding bonds issued to refund bonds issued

10
      before May 4, 1955, the superintendent of public instruction

11
      shall issue the certificate of qualification if the superinten-

12
      dent finds that the refunding bonds comply with the requirements

13
      set forth in subsection (1)(c).  For refunding bonds issued to

14
      refund bonds  issued on or after May 4, 1955,  or issued to

15
      refund loans from the state made under the authority of this act,

16
      the  superintendent  STATE TREASURER shall issue the certificate

17
      of qualification if the  superintendent  STATE TREASURER finds

18
      that the refunding bonds comply with the requirements set forth

19
      in subsection  (1)(c)  (1)(B), (1)(C), AND (1)(N), TO THE EXTENT

20
      THOSE PROVISIONS ARE APPLICABLE TO REFUNDING BONDS, and also that

21
      the refunding bonds are being issued to refund loans from the

22
      state made under the authority of this act or that the bonds rep-

23
      resenting the original indebtedness  either  were qualified  or

24
      satisfied the requirements for qualification set forth in

25
      subsection (1)(d) and (e) in effect when issued or would have

26
      satisfied the requirements set forth in subsection (1)(d) and (e)

27
      had those requirements been in effect when the bonds were issued



   04154'01 **                                  19

 1
      UNDER THIS ACT.  Refunding bonds issued to refund loans from the

 2
      state made under the authority of this act shall be considered as

 3
      refunding bonds for all purposes including section 16 of article

 4
      IX of the state constitution of 1963.

 5
           (3)  The requirement of subsection (1)(f) does not apply to

 6
      a bond issue that is approved by the school district electors

 7
      between December 31, 1990 and July 1, 1991 and that is in part

 8
      ineligible for qualification.  A series of bonds for such a bond

 9
      issue may be qualified by the superintendent of public instruc-

10
      tion if it is limited to either a project or projects eligible

11
      for qualification or refunding of obligations issued for a pur-

12
      pose described in section 1274a of Act No. 451 of the Public Acts

13
      of 1976, or both.  THE STATE TREASURER SHALL DEVELOP, PUBLISH IN

14
      1 OR MORE TREASURY BULLETINS, REVIEW AT LEAST ANNUALLY, AND

15
      REVISE AS NEEDED ALL OF THE FOLLOWING:

16
           (A) COST PARAMETERS AS DESCRIBED IN SUBSECTION (1)(C).

17
           (B) PARAMETERS FOR DETERMINING ADVERSE FINANCIAL IMPACT AS

18
      DESCRIBED IN SUBSECTION (1)(I).

19
           (C) PROCEDURES FOR APPROVAL OF CHANGES IN PROJECTS AS

20
      DESCRIBED IN SUBSECTION (1)(J).

21
           (D) CRITERIA FOR DETERMINING PROPER AMORTIZATION AS

22
      DESCRIBED IN SUBSECTION (1)(M).

23
           (E) ANY OTHER CRITERIA RELEVANT TO THIS ACT THAT THE STATE

24
      TREASURER CONSIDERS NECESSARY TO EVALUATE COMPLIANCE WITH SUBSEC-

25
      TION (1).

26
           (4) IN DETERMINING WHETHER A BOND ISSUE OR APPLICATION MEETS

27
      THE REQUIREMENTS OF SUBSECTION (1), THE STATE TREASURER SHALL NOT



   04154'01 **                                  20

 1
      REQUIRE COMPLIANCE WITH ANY REQUIREMENT ESTABLISHED BY THE STATE

 2
      TREASURER UNDER SUBSECTION (3) THAT IS PUBLISHED LESS THAN 30

 3
      DAYS BEFORE THE DATE THE APPLICATION IS RECEIVED BY THE STATE

 4
      TREASURER.

 5
           (5) IF THE STATE TREASURER DETERMINES UNDER SUBSECTION

 6
      (1)(I) THAT THE QUALIFICATION OF A BOND ISSUE, IN WHOLE OR IN

 7
      PART, WILL HAVE AN ADVERSE FINANCIAL IMPACT ON THIS STATE OR THE

 8
      SCHOOL DISTRICT BASED ON PARAMETERS ESTABLISHED BY THE STATE

 9
      TREASURER UNDER SUBSECTION (3), THE STATE TREASURER SHALL NOTIFY

10
      THE SCHOOL BOARD OF THE SCHOOL DISTRICT IN WRITING OF THIS DETER-

11
      MINATION AT LEAST 60 DAYS BEFORE MAKING THE FINAL DETERMINATION

12
      OF WHETHER TO ISSUE HIS OR HER CERTIFICATE QUALIFYING THE BOND

13
      ISSUE.  THE SCHOOL BOARD SHALL HOLD A PUBLIC MEETING WITHIN 30

14
      DAYS AFTER RECEIVING THIS NOTIFICATION TO REVIEW THE STATE

15
      TREASURER'S CONCERNS AND, AFTER DISCUSSION AND CITIZEN INPUT, THE

16
      SCHOOL BOARD SHALL VOTE ON EACH CONCERN RAISED BY THE STATE TREA-

17
      SURER ON WHETHER TO CONTINUE TO HAVE THAT ASPECT OF THE PROJECT

18
      REMAIN IN THE BOND ISSUE.  WITHIN 5 DAYS AFTER THIS MEETING, THE

19
      SCHOOL BOARD SHALL NOTIFY THE STATE TREASURER IN WRITING OF THE

20
      SCHOOL BOARD'S ACTION.  IF THE SCHOOL BOARD HAS ADOPTED A RESOLU-

21
      TION STATING THAT A DISPUTED PART OF THE BOND ISSUE SHOULD REMAIN

22
      IN THE PROJECT, THE STATE TREASURER MAY NOT DISAPPROVE THE QUALI-

23
      FICATION OF THE BOND ISSUE UNDER SUBSECTION (1)(I) BASED ON THAT

24
      PART OF THE BOND ISSUE.  THE DECISION OF THE SCHOOL BOARD IS

25
      FINAL.

   26      (6) IN DETERMINING WHETHER COMPELLING JUSTIFICATION EXISTS,

27
      THE STATE TREASURER SHALL CONSIDER THE HEALTH, SAFETY, AND



   04154'01 **                                  21

 1
      WELFARE OF THE SCHOOL DISTRICT AND SHALL CONSIDER THE ABILITY OF

 2
      THE SCHOOL DISTRICT TO PROVIDE ADEQUATE EDUCATIONAL PROGRAMS.

 3
           Sec. 4a. (1) Subject to subsection (2), an unexpended bal-

 4
      ance of the proceeds of sale of any school district bonds

 5
       heretofore or hereafter issued,  remaining after completion of

 6
       the project, to the extent of  ALL PROJECTS AUTHORIZED IN THAT

 7
      BOND ISSUE SHALL BE APPLIED FIRST TO REPAYMENT OF ANY AMOUNT OWED

 8
      TO THE SCHOOL BOND LOAN FUND FOR THAT BOND ISSUE AND THEN TO THE

 9
      PAYMENT OR PREPAYMENT OF PRINCIPAL ON THAT BOND ISSUE.  HOWEVER,

10
      IF PERMISSION IS GRANTED IN WRITING BY THE STATE TREASURER, SOME

11
      OR ALL OF THE UNEXPENDED BALANCE, NOT TO EXCEED 15% of the amount

12
      of the BOND issue,  or, for a fourth class school district

13
      located in a county with a population of not more than 27,000, to

14
      the extent of 40% of the amount of the issue, with the approval

15
      of the electors in the case of bonds issued before August 28,

16
      1964, may be used for school construction, equipment and site

17
      acquisition and development if that use is approved by the super-

18
      intendent of public instruction, and any remaining balance shall

19
      be paid immediately into the bond and interest redemption fund

20
      established for the bonds and shall be used either for the

21
      redemption of callable bonds, or, before the first call date

22
      only, for purchasing the bonds on the open market at not more

23
      than the fair market value or used to reduce the amount required

24
      to be levied to meet current principal and interest on the bonds

25
      as they become due.  Any unexpended balance of the proceeds of

26
      sale of any school district bonds heretofore or hereafter issued,

27
      remaining after payment in full of the principal of and interest



   04154'01 **                                  22

 1
      on the bonds, may be used to increase or continue expenditures

 2
      for any of the projects or purposes for which the bonds were ini-

 3
      tially authorized and issued, even though all projects for which

 4
      the bonds were initially authorized and issued have not been

 5
      completed.  This section shall apply unless allocations of speci-

 6
      fied amounts for stated projects or purposes were contained in

 7
      the ballot question by which the bonds were initially authorized,

 8
      in which case the use must be approved by the superintendent of

 9
      public instruction  MAY BE USED FOR CAPITAL EXPENDITURES.

10
           (2) The  superintendent of public instruction  STATE

11
      TREASURER shall not approve  a  THE use of  the  AN unexpended

12
      balance of the proceeds of any school district bonds FOR ADDI-

13
      TIONAL CAPITAL EXPENDITURES as authorized under subsection (1)

14
      unless he or she finds that the school district seeking approval

15
      has demonstrated a compelling justification for  not immediately

16
      paying all of the unexpended balance into the bond and interest

17
      redemption fund established for the bonds  THAT USE.

18
            (3) As used in this section, "fourth class school district"

19
      means a school district organized as a school district of the

20
      fourth class under the school code of 1976, Act No. 451 of the

21
      Public Acts of 1976, being sections 380.1 to 380.1852 of the

22
      Michigan Compiled Laws.

23
           Sec. 5.  All certificates of qualification shall be kept in

24
      a permanent file in the office of the  superintendent of public

25
      instruction  STATE TREASURER and copies  thereof  OF THESE

26
      CERTIFICATES shall be delivered to the school district.  and to

27
      the office of the municipal finance commission or its successor



   04154'01 **                                  23

 1
      agency.  Applications  A SCHOOL DISTRICT SHALL APPLY for  such

 2
      certificates shall be made  PRELIMINARY QUALIFICATION AND FOR A

 3
      CERTIFICATE OF QUALIFICATION on forms prepared and supplied by

 4
      the  superintendent of public instruction and he or she  STATE

 5
      TREASURER.  THE STATE TREASURER shall prescribe reasonable rules

 6
      and regulations in respect  thereto  TO THE APPLICATIONS.  If

 7
       prior to the issuance of bonds, the  A school district does not

 8
      secure  such  A certificate of qualification from the

 9
       superintendent of public instruction  STATE TREASURER BEFORE THE

10
      ISSUANCE OF BONDS, it shall be  deemed  CONSIDERED to have waived

11
      the right to have  such  THOSE bonds  so  qualified.

12
           Sec. 6.  (1)  In  FOR any school district THAT OWES AN

13
      EXISTING BALANCE DUE TO THE SCHOOL BOND LOAN FUND OR where the

14
      amount necessary to be levied in any year for principal and

15
      interest on qualified bonds, including any necessary allowance

16
      for estimated tax delinquencies but excluding any funds pledged

17
      to and available for the payment of the principal and interest,

18
      exceeds that amount stipulated in section 2, the school district,

19
      on or before 60 days  prior to  BEFORE the time of the certifica-

20
      tion of its tax levy to the assessing officer, shall file with

21
      the  superintendent of public instruction and the municipal

22
      finance commission or its successor agency a preliminary applica-

23
      tion for a loan from the state in the amount of any part of such

24
      excess over that amount stipulated in section 2 which it does not

25
      propose to levy in such year  STATE TREASURER AN ANNUAL LOAN

26
      ACTIVITY APPLICATION THAT PROVIDES AN ESTIMATE OF THE AMOUNT TO

27
      BE BORROWED FROM OR REPAID TO THE SCHOOL BOND LOAN FUND DURING



   04154'01 **                                  24

 1
      THAT SCHOOL FISCAL YEAR.  If the excess over that amount

 2
      stipulated in section 2 is reached or increased by reason of

 3
      bonds authorized by resolution of the SCHOOL board  of education

 4
      of the school district within the 60-day period,  an original or

 5
      amended application shall be filed within that period.  An appli-

 6
      cation shall set forth the amount of the last state equalized

 7
      valuation of the school district and, for each of the 5 years

 8
      immediately preceding the application, the amount of principal

 9
      and interest on qualified bonds necessary to be levied upon the

10
      tax roll of that year, the amount of any moneys on hand pledged

11
      to and available for the payment of the principal and interest,

12
      the probable delinquency in tax collections at the times the

13
      principal and interest will become due, the estimated amount of

14
      the loan which will be required from the state, and any other

15
      pertinent facts which may be required to be included in the

16
      application by the superintendent of public instruction  THE DOC-

17
      UMENTATION SUBMITTED AT THE TIME OF FINAL QUALIFICATION IS CON-

18
      SIDERED TO MEET THIS ACTIVITY APPLICATION REQUIREMENT.

19
           (2) THE ANNUAL LOAN ACTIVITY APPLICATION REQUIRED UNDER

20
      SUBSECTION (1) SHALL BE SUBMITTED IN A FORMAT PRESCRIBED BY THE

21
      STATE TREASURER AND SHALL PROVIDE THE ADJUSTED TAXABLE VALUE,

22
      DEBT SERVICE, AND ANY OTHER INFORMATION NECESSARY TO DETERMINE

23
      THE PROPER REQUIRED MILLAGE LEVY AS PRESCRIBED IN SECTION 2.  THE

24
      APPLICATION SHALL INCLUDE A RESOLUTION PASSED BY THE SCHOOL BOARD

25
      AUTHORIZING A DESIGNATED SCHOOL DISTRICT OFFICIAL TO COMPLETE ALL

26
      NECESSARY DOCUMENTS TO OBTAIN A LOAN FROM THE SCHOOL BOND LOAN





   04154'01 **                                  25

 1
      FUND OR FOR MAKING REPAYMENT TO THE SCHOOL BOND LOAN FUND FOR THE

 2
      YEAR.

 3
           (3) The  superintendent of public instruction  STATE

 4
      TREASURER shall examine  the  AN ANNUAL LOAN ACTIVITY application

 5
      and shall  request the state treasurer to compute  DETERMINE the

 6
       computed  millage REQUIRED under section  2(2), if
   applicable,

 7
      2 as soon as possible and notify the school district of any erro-

 8
      neous statements or assumptions in the application  and  within

 9
      the 60-day period.  shall approve or deny the preliminary appli-

10
      cation in whole or in part and shall notify the school district

11
      of his or her action.  The school district shall include in its

12
      tax levy  any  THE amount  otherwise  required to be levied
   for

13
      the payment of principal and interest on qualified bonds for

14
      which it does not secure approval for a state loan  as aforesaid

15
      UNDER SECTION 2.

16
           Sec. 7.  (1) If a loan from the state  shall become  BECOMES

17
      necessary for the payment of principal and interest on qualified

18
      bonds in accordance with  such approved preliminary application

19
      A SCHOOL DISTRICT'S SCHOOL BOND LOAN FUND ANNUAL LOAN ACTIVITY

20
      APPLICATION UNDER SECTION 6, or for any reason pursuant to  said

21
      section 16 of article  9  IX of the STATE CONSTITUTION OF 1963

22
       constitution  and this act, then the school district shall file

23
      with the  superintendent of public instruction a supplemental

24
      application (or an original application, if no preliminary appli-

25
      cation has been filed), setting forth the amount of the tax col-

26
      lections to the date of said application, an estimate of probable

27
      collections prior to the time when such principal and interest



   04154'01 **                                  26

 1
      will become due and the amount of the loan necessary from the

 2
      state.  Such supplemental or original  STATE TREASURER AN APPLI-

 3
      CATION FOR A LOAN UNDER THIS ACT AND A CONFIRMATION OF THE FINAL

 4
      LOAN AMOUNT IN THE FORMAT PRESCRIBED BY THE STATE TREASURER.

 5
      THIS application shall be made not less than 30 days  prior to

 6
      BEFORE the time when the proceeds of the loan will be necessary

 7
      in order to pay maturing principal or interest or both.   Upon

 8
      receipt of such supplemental or original application, it shall be

 9
      the duty of the superintendent of public instruction, after

10
      auditing the same, to forward to the state treasurer a statement

11
      setting forth the amount to be loaned to the school district for

12
      the payment of principal and interest and the date on or before

13
      which such loan shall be made.  He shall also prepare the proper

14
      voucher as a basis for the issuance of the necessary warrant in

15
      accordance with state accounting practices.  Upon receipt of such

16
      statement and warrant, it shall be the duty of the state trea-

17
      surer to loan to the school district from "the school bond loan

18
      fund" the amount set forth in the statement of the superintendent

19
      of public instruction on or before the date specified therein.

20
      The state treasurer upon the making of said loan shall obtain

21
      from the school district a receipt for the amount so loaned,

22
      which receipt shall specify  THE SCHOOL DISTRICT SHALL FILE A

23
      CONFIRMATION OF FINAL LOAN AMOUNT NOT LESS THAN 10 DAYS BEFORE

24
      THE TIME WHEN PROCEEDS OF THE LOAN WILL BE NECESSARY IN ORDER TO

25
      PAY MATURING PRINCIPAL OR INTEREST OR BOTH.  THE STATE TREASURER

26
      MAY WAIVE THE REQUIREMENT FOR SUBMISSION OF THE APPLICATION FOR

27
      LOAN FOR A SCHOOL DISTRICT THAT HAS DEMONSTRATED THE CAPABILITY



   04154'01 **                                  27

 1
      TO MEET THE REQUIREMENTS OF SECTION 2 AND HAS BEEN RESPONSIBLE IN

 2
      THE DISCHARGE OF ITS DEBTS IN AN ORDERLY AND BUSINESSLIKE

 3
      MANNER.

 4
           (2) UPON RECEIPT OF AN APPLICATION FOR LOAN, THE STATE TREA-

 5
      SURER SHALL EXAMINE DOCUMENTS AND NOTIFY THE SCHOOL DISTRICT OF

 6
      ANY ERRONEOUS STATEMENTS.  UPON RECEIPT OF A CONFIRMATION OF LOAN

 7
      AMOUNT, THE STATE TREASURER SHALL LOAN TO THE SCHOOL DISTRICT

 8
      FROM THE SCHOOL BOND LOAN FUND THE AMOUNT DETERMINED BY THE STATE

 9
      TREASURER IN ACCORDANCE WITH THIS ACT ON OR BEFORE THE DATE SPEC-

10
      IFIED IN THE APPLICATION.

11
           (3) WITH RESPECT TO A LOAN MADE TO A SCHOOL DISTRICT UNDER

12
      THIS SECTION OR ANY OTHER PROVISION OF THIS ACT, THE SCHOOL DIS-

13
      TRICT IS CONSIDERED TO HAVE AGREED TO the terms of repayment in

14
      accordance with the provisions of  said  section 16 of article

15
       9  IX of the STATE CONSTITUTION OF 1963  constitution  and
   this

16
      act.  Upon receipt by  any  THE school district of  such  THE

17
      loan,  it shall be the duty of  the treasurer  thereof to  OF
   THE

18
      SCHOOL DISTRICT SHALL cause the  same  PROCEEDS to be deposited

19
      in the debt retirement fund and used solely for the payment of

20
      principal and interest on qualified bonds.

21
           Sec. 8.  (1) If for any reason  any  A school district will

22
      be or is unable to pay the principal and interest on its quali-

23
      fied bonds when due, then the school district shall borrow and

24
      the state shall loan to it an amount sufficient to enable the

25
      school district to make the payment.   Any  A school district

26
       which  THAT finds that it will be or is unable to pay  such 
   THE

27
      principal or interest ON ITS QUALIFIED BONDS when due shall



   04154'01 **                                  28

 1
       forthwith  PROMPTLY make application for the necessary loan and

 2
      the state shall, in time to prevent default in  such  THE pay-

 3
      ment, make  such  THE loan and obtain a receipt  therefor as pro-

 4
      vided in section 7 of this act  FOR THE LOAN.   In the event

 5
      that

 6
           (2) UPON NOTIFICATION ACCEPTABLE TO THE STATE TREASURER FROM

 7
      THE AGENT OR OFFICER CHARGED WITH MAKING PAYMENT OF BOND PRINCI-

 8
      PAL OR INTEREST THAT THE SCHOOL DISTRICT HAS NOT DEPOSITED SUFFI-

 9
      CIENT FUNDS TO PAY THE PRINCIPAL OR INTEREST ON ANY QUALIFIED

10
      BOND WHEN DUE, WHETHER OR NOT AN APPLICATION FOR A LOAN TO PAY

11
      THE PRINCIPAL OR INTEREST HAS BEEN MADE OR APPROVED, THE STATE

12
      TREASURER SHALL PROMPTLY PAY FUNDS TO THAT AGENT OR OFFICER TO BE

13
      USED TO PAY THE PRINCIPAL OR INTEREST ON THE QUALIFIED BOND WHEN

14
      DUE.  IF the principal or interest on any qualified bond is not

15
      paid when due upon proper  presentation of the bond or interest

16
      coupon to the agent or  NOTIFICATION FROM THE officer charged

17
      with making payment,  thereof (irrespective of  whether OR NOT an

18
      application for a loan to pay  such  THE principal or interest

19
      has been made or  approved)  APPROVED, the state treasurer shall

20
       forthwith  PROMPTLY pay  such  THE principal or interest TO
   THE

21
      BONDHOLDER upon presentation of the bond or coupon to  him  THE

22
      STATE TREASURER.  Any amount  so  paid by the state treasurer

23
       shall be deemed  UNDER THIS SUBSECTION IS CONSIDERED a loan made

24
      to the school district pursuant to the requirements of  said

25
      section 16 of article  9  IX of the STATE CONSTITUTION OF 1963

26
       constitution  and this act, and the school district shall give a

27
      receipt  therefor  FOR THE AMOUNT LOANED and repay  such  THE



   04154'01 **                                  29

 1
      loan in the same manner as  hereinbefore  provided IN THIS ACT

 2
      with respect to other loans  :  Provided, That any  UNDER THIS

 3
      ACT.  ANY funds of the school district  which  THAT are or become

 4
      available in its hands or in the hands of the paying agent or

 5
      officer for payment of the principal or interest  which  THAT has

 6
      been paid by the state treasurer UNDER THIS SUBSECTION shall

 7
       forthwith  PROMPTLY be remitted to the state treasurer and

 8
      applied toward repayment of  said  THE loan UNDER THIS SECTION.

 9
           Sec. 9.  (1) Except as provided in this section, section 2,

10
      and section 10a,  any  A school district having received 1 or

11
      more loans from  "the  THE school bond loan  funds" under sec-

12
      tions 27 and 28 of article X of the state constitution of 1908 or

13
      section 16 of article IX of the state constitution of 1963 and

14
      implementing acts  FUND shall continue to levy on its tax rolls

15
      not less than  13 mills  THE MILLAGE RATE LEVIED BY THE SCHOOL

16
      DISTRICT DURING THE MOST RECENT YEAR IN WHICH THE SCHOOL DISTRICT

17
      WAS RECEIVING A LOAN FROM THE SCHOOL BOND LOAN FUND or the

18
       computed  millage RATE REQUIRED under section  2(2)  2,
   which-

19
      ever is  less  GREATER, on each dollar of its  assessed valuation

20
      as last equalized by the state  ADJUSTED TAXABLE VALUE, exclusive

21
      of any levy for unqualified bonds or for school operating pur-

22
      poses, until all loans made to the school district by the state

23
      are repaid with interest at rates to be annually determined by

24
      the state treasurer.  Except as provided in this section, these

25
      rates shall represent  not more than  the PROJECTED average

26
      interest rate TO BE paid by the state on obligations issued under

27
       sections 27 and 28 of article X of the state constitution of



   04154'01 **                                  30

 1
      1908 and  section 16 of article IX of the state constitution of

 2
      1963 and implementing acts PROJECTED TO BE OUTSTANDING OVER THE

 3
      NEXT SUCCEEDING 5-YEAR PERIOD, AS DETERMINED BY THE STATE

 4
      TREASURER, and, except to the extent required to maintain the

 5
      tax-exempt status of bonds or notes issued by the state pursuant

 6
      to this act and  Act No. 112 of the Public Acts of 1961, being

 7
      sections 388.981 to 388.985 of the Michigan Compiled Laws  1961

 8
      PA 112, MCL 388.981 TO 388.985, not less than that PROJECTED

 9
      average interest rate, computed to the nearest 1/8 of 1%.  The

10
      state treasurer shall annually certify to the several borrowing

11
      SCHOOL districts the rate of interest to be currently collected.

12
      The proceeds of each  such  levy shall be used first for the pay-

13
      ment of the minimum principal and interest requirements on the

14
      qualified bonds that  shall  become due before the next tax col-

15
      lection, and any balance INCLUDING ANY ANNUAL EXCESS shall be

16
      paid to the state until the principal and interest due the state

17
      are paid.  THE SCHOOL DISTRICT SHALL CALCULATE THE AMOUNT OF

18
      EXCESS, IF ANY, AFTER THE COMPLETION OF EACH SEMIANNUAL DEBT

19
      SERVICE PAYMENT AND SHALL REMIT THE UNENCUMBERED PORTION TO THE

20
      STATE WITHIN 30 DAYS AFTER THE COMPLETION OF THE SEMIANNUAL DEBT

21
      SERVICE PAYMENT.  THE INTEREST PAYMENT OR ACCRUAL REQUIRED BY

22
      THIS SECTION AND THIS ACT MAY BE REDUCED AS PROVIDED BY ANY

23
      LAWFUL SUBSIDY.

24
           (2) Before the adoption of a resolution approving annexation

25
      and transfer of a school district to be divided pursuant to

26
      part 10a of the  school code of 1976, Act No. 451 of the Public

27
      Acts of 1976, being sections 380.941 to 380.949 of the Michigan



   04154'01 **                                  31

 1
      Compiled Laws  REVISED SCHOOL CODE, 1976 PA 451, MCL 380.941 TO

 2
      380.949, the superintendent of public instruction and the state

 3
      treasurer may issue a joint order determining that, upon division

 4
      of a school district pursuant to part 10a of the  school code of

 5
      1976  REVISED SCHOOL CODE, the divided SCHOOL district or any

 6
      other school district affected by the division, or all, may cease

 7
      levying on its tax rolls for all or a portion, as shall be deter-

 8
      mined in the joint order by the superintendent of public instruc-

 9
      tion and the state treasurer, of the amount required by subsec-

10
      tion (1) for repayment of all or a portion of the principal of or

11
      interest on, or both, the loans received before the issuance of

12
      the joint order from the school bond loan fund for a number of

13
      years to be determined in the joint order by the superintendent

14
      of public instruction and the state treasurer, not to exceed 5

15
      years, beginning with the first tax levy after the election

16
      approving the division or until the bonded indebtedness of the

17
      district for which loans have been received has been paid in full

18
      or provision for the payment has been made, whichever occurs

19
      first.  During the period in which the levy is waived pursuant to

20
      this subsection, the school district payments due to the state

21
      pursuant to subsection (1) from that waived levy shall be

22
      waived.  After expiration of the period of waiver, each school

23
      district shall levy each year for repayment of loans an amount

24
      designated in the order of the  superintendent of public instruc-

25
      tion and the  state treasurer, which amount, when added to the

26
      amount required for debt service, shall not be more than the

27
      amount required by subsection (1) until all loans to the school



   04154'01 **                                  32

 1
      district by the state are repaid with interest at rates to be

 2
      determined annually by the state treasurer.  A school district

 3
      determining not to levy for loan repayment during the following

 4
      year shall notify before December 15 of each year the state trea-

 5
      surer of its determination not to levy and shall supply the

 6
       superintendent of public instruction or the  state treasurer

 7
      with any additional related information the  superintendent of

 8
      public instruction or the  state treasurer  shall require

 9
      REQUIRES.

10
           (3) During any year in which a school district levy is

11
      waived UNDER THIS SECTION, an amount equal to the annual interest

12
      for that year on the amount owed by the school district to the

13
      school bond loan fund shall be added to the amount of loans to

14
      the school district by the state.

15
           (4) Any repayment of principal or interest that was waived

16
      pursuant to subsection (2) shall be transferred to the general

17
      fund.  if general fund revenue supplements were required to pay

18
      obligations issued under sections 27 and 28 of article X of the

19
      state constitution of 1908 or section 16 of article IX of the

20
      state constitution of 1963 during the period of the waiver.

21
           Sec. 9b.  To receive a loan under this act,  or a general

22
      fund incentive payment under section 9a,  a school district shall

23
      agree to take actions and to refrain from taking actions as nec-

24
      essary to maintain the tax-exempt status of bonds or notes issued

25
      by the state pursuant to this act and  Act No. 112 of the Public

26
      Acts of 1961, being sections 388.981 to 388.985 of the Michigan

27
      Compiled Laws  1961 PA 112, MCL 388.981 TO 388.985.  The state



   04154'01 **                                  33

 1
      treasurer shall take the actions permitted by law that are

 2
      necessary to maintain the tax-exempt status of obligations issued

 3
      by school districts to provide the funds to repay a loan made

 4
      under this act.

 5
           SEC. 9C.  A SCHOOL DISTRICT THAT HAS AN EXISTING BALANCE DUE

 6
      TO THE SCHOOL BOND LOAN FUND SHALL INCLUDE IN ITS AUDIT REPORT

 7
      FILED UNDER SECTION 5 OF CHAPTER III OF THE MUNICIPAL FINANCE

 8
      ACT, 1943 PA 202, MCL 133.5, A REVIEW OF ITS SCHOOL BOND LOAN

 9
      ACTIVITIES AND QUALIFIED BOND DEBT RETIREMENT ACTIVITIES.  THIS

10
      REVIEW SHALL PROVIDE AN OPINION ON THE SCHOOL DISTRICT'S COMPLI-

11
      ANCE WITH THE REQUIREMENTS OF THIS ACT REGARDING BORROWING AND

12
      REPAYMENT OF THE SCHOOL BOND LOAN FUND.  THIS OPINION SHALL BE

13
      INCLUDED IN THE SCHOOL DISTRICT'S ANNUAL AUDIT REPORT UNDER THIS

14
      SECTION.

15
           Sec. 10.  Except as provided in section 10a, if a school

16
      district that has 1 or more loans pursuant to either this act or

17
       Act No. 151 of the Public Acts of 1955, as amended, being sec-

18
      tions 388.931 to 388.938 of the Michigan Compiled Laws  1955

19
      PA 151, MCL 388.931 TO 388.938, or both, fails to levy at least

20
      the amount specified in section 2 or section 9, as applicable,

21
      upon its  state equalized valuation  ADJUSTED TAXABLE VALUE for

22
      debt retirement purposes for qualified bonds and for repayment of

23
      a state loan made under this act while any part of the loan is

24
      unpaid, FAILS TO PROPERLY ALLOCATE ITS MILLAGE BETWEEN DEBT SERV-

25
      ICE ACCOUNTS, or defaults in its agreement to repay a loan or any

26
      installment of a loan,  money  THE SCHOOL DISTRICT SHALL INCREASE

27
      PAYMENTS TO THE SCHOOL BOND LOAN FUND BY THE AMOUNT OF THE



   04154'01 **                                  34

 1
      DEFAULT DURING THE NEXT TAX YEAR THROUGH AN INCREASE IN THE

 2
      ANNUAL DEBT SERVICE MILLAGE LEVY ABOVE THE AMOUNT THAT WOULD HAVE

 3
      BEEN REQUIRED BY STATUTE TO MEET THAT YEAR'S DEBT SERVICE NEEDS,

 4
      OR THE PREVIOUS YEAR'S DEBT LEVY, WHICHEVER IS GREATER.  THE

 5
      SCHOOL DISTRICT MAY USE OTHER METHODS OF REIMBURSING THE SCHOOL

 6
      BOND LOAN FUND INCLUDING A TRANSFER OF GENERAL FUNDS, IF APPROVED

 7
      BY THE STATE TREASURER. MONEY shall not be distributed to the

 8
      school district out of the state school aid fund until satisfac-

 9
      tory arrangements have been made with the  superintendent of

10
      public instruction  STATE TREASURER for the payment of the amount

11
      in default.

12
           Sec. 10a.  Upon request made by a school district before

13
      June 1 of any year, the  superintendent of public instruction and

14
      the  state treasurer annually may  jointly  issue an order
   waiv-

15
      ing all or a portion of the millage required to be levied by  a

16
      THE school district pursuant to section 9(1) if he or she finds

17
      all of the following:

18
           (a) The school board of the school district has applied to

19
      the department of  education  TREASURY for permission to levy

20
      less than the millage required to be levied pursuant to

21
      section 9(1).

22
           (b) The application UNDER SUBDIVISION (A) specifies the

23
      number of mills the school district requests permission to levy.

24
           (c) The school board, by resolution, has agreed to transfer

25
      from available identified funds of the school district to the

26
      school debt retirement fund an amount equal to the amount that





   04154'01 **                                  35

 1
      would have been raised by the levy of the millage requested to be

 2
      waived.

 3
           (d) The school board, by resolution, has agreed that the

 4
      funds to be transferred to the school debt retirement fund shall

 5
      be earmarked for the payment of state loans to the school dis-

 6
      trict and for debt retirement purposes for qualified bonds before

 7
      taxes are certified for the year the school board is requesting

 8
      permission to levy less than the millage required to be levied

 9
      pursuant to section 9(1).

10
           (e) The school board, by resolution, has agreed to comply

11
      with all conditions that the  superintendent of public instruc-

12
      tion and the  state treasurer  consider are  CONSIDERS

13
      necessary.

14
           Sec. 11.  (1)  Any  A school district applying for prelimi-

15
      nary qualification of bonds or final qualification of refunding

16
      bonds under this act shall pay a fee for the preliminary qualifi-

17
      cation of bonds  or  AND final qualification of BONDS, INCLUDING

18
      refunding bonds, which fee shall be used toward defraying the

19
      administrative expenses in connection with this act, WITH 1961

20
      PA 112, MCL 388.981 TO 388.985, and  Act No. 151 of the Public

21
      Acts of 1955, as amended, being sections 388.931 to 388.938 of

22
      the Michigan Compiled Laws  WITH 1955 PA 151, MCL 388.931 TO

23
      388.938.

24
           (2) The fee FOR FINAL QUALIFICATION shall be paid to the

25
       superintendent of public instruction  STATE TREASURER within 30

26
      days after the money obtained through the sale of the preliminary

27
      qualified bonds or finally qualified refunding bonds has been



   04154'01 **                                  36

 1
      received by the treasurer of the SCHOOL board  of education  of

 2
      the school district.   The superintendent of public instruction

 3
      shall promulgate necessary rules in accordance with the adminis-

 4
      trative procedures act of 1969, Act No. 306 of the Public Acts of

 5
      1969, being sections 24.201 to 24.328 of the Michigan Compiled

 6
      Laws.  The amount of the fee FOR FINAL QUALIFICATION to be

 7
      charged to the school district shall be determined by the

 8
       superintendent of public instruction  STATE TREASURER.  The

 9
      amount of the fee shall vary according to the amount of the bond

10
      issue,  except that it shall not be less than $100.00, and the

11
      BASED ON A SCHEDULE PUBLISHED BY THE STATE TREASURER.  THE total

12
      amount to be charged to all school districts in any 1 fiscal year

13
      shall be approximately equal to the estimated administrative

14
      expenses in connection with this act for the same fiscal year.

15
           (3) Upon failure of any school district to pay the prelimi-

16
      nary qualification fee or final qualification  of refunding

17
      bonds  fee within the time specified, the  superintendent of

18
      public instruction  STATE TREASURER may withhold the amount of

19
      the fee from the payment of state school aid money next due the

20
      SCHOOL district.

21
           SEC. 11A.  ALL FEES COLLECTED UNDER THIS ACT SHALL BE DEPOS-

22
      ITED INTO A SEPARATE FUND ESTABLISHED WITHIN THE STATE TREASURY

23
      AND SHALL BE RESTRICTED TO ADMINISTERING AND ENFORCING THIS ACT.

24
      THE UNEXPENDED AND UNOBLIGATED BALANCE OF THIS FUND AT THE END OF

25
      THE FISCAL YEAR SHALL BE CARRIED FORWARD TO THE SUCCEEDING FISCAL

26
      YEAR AND SHALL NOT REVERT TO THE GENERAL FUND BUT SHALL BE

27
      AVAILABLE FOR REAPPROPRIATION FOR THE NEXT FISCAL YEAR.



   04154'01 **                                  37

 1
           Sec. 12.   Any  A person who  shall  knowingly 
   make any

 2
      MAKES A false statement or  conceal any  CONCEALS A material

 3
      information for the purpose of obtaining QUALIFICATION OF A BOND

 4
      ISSUE UNDER THIS ACT OR FOR THE PURPOSE OF OBTAINING a loan under

 5
       the provisions of  this act, or  use  WHO KNOWINGLY USES ALL
   OR

 6
      PART OF the proceeds of a loan  or any portion thereof  OBTAINED

 7
      UNDER THIS ACT for any purpose not authorized by this act  shall

 8
      be  IS guilty of a felony.

 9
           Enacting section 1.  Sections 4b, 4c, and 9a of 1961 PA 108,

10
      MCL 388.954b, 388.954c, and 388.959a, are repealed.

11
           Enacting section 2.  This amendatory act does not take

12
      effect unless Senate Bill No. _____ or House Bill No. 4877

13
      (request no. 04160'01 **) of the 91st Legislature is enacted into

14
      law.





























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